http://www.rcg.tv

what a day for rcg, massive share volume I dont expect this share price to fall back down to 120p now. RCG is in the limelight now at last. 20 million cash just sat in the bank hey, margins improving maybe 3 share price by the end of 07. I still think RCG will be one of the best performing shares of the year. HOLD

I too do not expect to see a drop to 1.20 but you never know.

Personally I am looking at adding at anything under 1.40

capa

With 20 million in the bank i dont expect any shares to be issued to pay for further expanding, there are so many big sells again at the end of day today this is my only worry. Anyone take a guess as to it profits for 2007?

I jumped back in at 148p as the price seemed to be holding up well and there should be some very good press comments in the next few days after results like this.

damn, was going to buy when they dropped to 110p last week but was hoping for a tad more, hindsights a wonderful thing they say, who would have thought the figures would be this good...?

From my friend Donaferentes on the other side:-

Some one above suggested 15% per 6 months growth in EPS. One needs to take into account the increased weighted average number of shares to arrive at a more accurate figure.

For 2006, 19,132k net profits equated to 10.8p fully diluted EPS - weighted average shares in issue during the year 177.15m.

2006H2 net profits were 11,904k. Let's increase them by 15% 2007H1 and 15% 2007H2 = 29,433k total for year.

At the end of the year there are 194.9m shares in issue. Let's guess a further 20m are issued for acquisitions, option exercises and remuneration. The average number of shares in issue during 2007 will be 207,400,000.

So EPS for 2007 on this highly conservative basis will be 14.2p - an increase of 31.4%. On a PE of 15 X 2007 EPS (resulting in a PEG of 0.48) this gives an SP target of 213p. At 20 X 2007 EPS we get a target SP of 284p.

As ever, I would expect results to substantially exceed this modest target. 250p must be readily in our grasp over the next 12 months.

IMHO
WDIK
DYOR

stockdog, you have to take into account a possible fall in earnings this year.

Potentially 2 years before they increase EPS again.........though perhaps just a 1 year period.........

The 12th March Investec Update is here :

http://www.ph.ed.ac.uk/~s9547654/RCGInvestec.pdf



.

PP - why would you imagine a 300% increase last year falls to less than zero this year?

Read the Investec update in the link above, its their forecast, they are the new broker, and its their update after results.............and they consult with their client, RCG.

RCG has an issue, in that earnings are not visible going forward.

The results just gone reported on a "weighted number of shares" and the 2007 figures must report on the full amount of shares in issue (which dilutes earnings), then there is tax and all sorts of things. This will be a period of consolidation on RCG, and it often happens, people follow the growth story, but forget all the other factors.

papel thanks for the investec link, i agree on the tax rate increasing to 7% but investec predictions are far to conservative (and they admit this in their report)along with what was written in the rcg tip in the shares mag about 5 weeks ago. Ok we wont see another 300% increase this year but at least 100% is easily possible with a USA deal.

Managed to get an add in sub 1.40 as hoped.

Broker notes on RCG have consistently been understated, gives them a lot of room to beat market estimates and surprise on the up side. Not a bad thing in my opinion.

capa

well done--I knew I should wait a bit longer to get back in! long term we're in a winner though so a few pence shouldn't matter---I hope.

I totally disagree with investec estimations on sales they are way to low! Rcg only down 2p today and look at the rest of the market.

check out rcg website won some awards...

argos, tax increases from 1.1% last year to 7% this year. Shares in issue goes up from 176m to 195m. This means that RCG must put in 22.5% extra profit before tax before making just the same earnings.

Last year was a record year, heavily bumped up by the launch and take up of the FX notebook, thats not going to be the case this year. Its the trouble with extreme record years, they are a hard act to follow, and this is one problem with RCG, there is very little visibility of future earnings.

Personally I feel Investec is a little conservative, and I see RCG putting in about the same earnings again.......which equates to a zero growth rate, and therefore a PER of about times 8.5.

Very worth a read, Colins visit report on the meeting with RCG :

http://boards.fool.co.uk/Message.asp?mid=10452762

The new CS note is out is seems, with a downgrade from buy to hold.

As soon as I get to see it, and the forecast figures, I'll let you know what they are, but would expect them to be around the levels of the Investec note.

papalPower thanks for the update. I am in the proccess of compairing the ints for 06 and full results. At interim 06 RCg turned over 22.6m (4.8m 2005) which exceeding full revenues in the whole of 2005 by 46%. The best case for investors is this to happen again meaning turnover for 1st half 07 =61.8million (06turnover)*1.46= 90million. When ints for 07 are out we shall see trading is strong though.

argos, a strong H1 07 is being suggested, and I would expect H1 07 to represent half of FY 06.

I would not compare like for like H1 06 and H1 07, as H1 06 was weak (in terms of the FY 06).

RCG are going into china this year, so I cant see earnings being the same. Looking at trade receiveables of 18.522 million and deposits, prepayments and other receivables of 7.6million things look up for Rcg.